Getting Debt-Free despite Struggling with MH problems

wordswords

To expand on the mortgage situation.. it is good news there as we are about to sign up for a 5 year fixed mortgage at about 2%, meaning repayments are £508 / month which is significently down from the £585 / month from our initial 2 year fix! Also it's fixed for a whole 5 years so we will hopefully avoid any housing market / inflation problems surrounding brexit.

Some really good news is that the mortgage valuation on our house was £170k! So the value of our house has gone from £146,600, which we paid for it in August 2015 to £170,000 in Feb 2017! This is a huge jump and, even though we have done quite a lot of refurbishment, we only paid £5k max in refurb costs, so this is shockingly good, really.

Our house is about 30 min. bus ride from the center of Manchester, so it's quite a central location. The area is pretty nice (apart from a few problems with youfs) and a new gym has just opened up down the end of the road so I think we got a bargain really.

wordswords

Summary of my current loan amounts etc:

£4,376 - personal loan (145 / month) (ends November 2019)
£683 - overdraft loan (100 / month) (ends November 2017)
£195 - festival tickets payment plan (65 / month) (ends June 2017)
£160 - music instrument loan from a friend (58 / month) (ends June 2017)

= £5,414 total

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Paid off loans

£1,000 (£85 / month) - Bathroom loan, paid off finally
£6,500 (£50 / month) - Mum mortgage deposit loan, written off

wordswords

Last week I switched my mobile phone contract from £30 / month with O2 to £10 / month with Virgin Mobile, thanks to a deal I found on MSE. Looking to make more savings on regular outgoings this month too.

wordswords

Another good news / bad news post:

Good news:

I will be moving jobs to a new company, assuming my references go through. The new company is going to pay quite a bit more money, which is good, and will have a lot more benefits financially.

* Base salary - going up from £43,400 to £50,000 a year
* Bonuses - going up from no bonuses to 3 bonus schemes, expected to pay on average around £7k a year on top of base salary.
* Healthcare benefits including sickness insurance and private health cover.

The extra monthly income means that we should be fine not having a lodger, and the bonuses should allow me to make large dents in my debt / accumalate savings.

Bad news:

I have just taken 3 weeks holiday at the old job, and because holiday is earned prorata, and the fact that the old job pays half a month in advance, half a month in lieu, combined with the fact that I have no savings, means that I'm going to have to take out an additional loan for £2,500! This is to cover the time between the reduced monthly pay packet of last job, and the new pay packet of new job.

Still, the increased income means I should be able to pay this off sooner, assuming I don't get fired from my job or anything like that.

So overall pretty good news! I was pretty sick of my last job anyway and the new company offers much more hope for progression.

Warren1989

Sounds like a positive change! Well done, keep working hard and everything will be grand!

Jo_Blogs

You're doing really great wordswords. Keep up the super effort as it will be worth it in the end

wordswords

Thanks Warren and Jo. Things do seem to be looking up, which I'm thankful for.

wordswords

Assuming my references are confirmed with the new job and I start work there, I should be able to cut down on the amount I spent on taxis per month. There is a bus 4 minutes walk away which should take me to work in 37 minutes. At the moment my commute is about 35 minutes, but I have to change between two trams - it's a pain and on both legs of the journey I never really get a chance to get into a book because I have to get up 5 minutes later. Also the tram stop is 10/15 minutes walk away from my house, and I really don't feel like making that walk first thing in the morning in the winter. So the more convenient commute should result in less money wasted on Ubers. At the moment I get an Uber to work every day which is like 8-10 pounds each day (!), so it's a fairly big deal.

wordswords

So.. I've been having some problems again. I ended up spending more than I should have, and some things came up such as my girlfriend moving over from Germany to the UK (which is really good of course, but costly!), so basically I now owe:

£3000 extra as part of my loan.
£2400 extra to my parents

I feel really bad about this. My repayments are now:

£200 / month to them to repay parents debt until 12 months
£160 / month to pay off main loan until years away
£100 / month until December to pay off

So that is £460 total in debt repayments per month.

On the plus side, my remortgage has gone through, so my monthly mortgage outgoings are now £508 / month instead of £600 / month. So that is good. I've just started a new job, and that will give me an extra £130 per month, after adjusting for the income that I have lost because the lodger is no longer living with us.

+£92 / month
+£130 / month

So that is £230 extra per month in additional money.

My girlfriend is on the verge of getting paid work now she has moved over from Germany, so hopefully she will be able to provide some money to help with living expenses. Once she is working this may reach £370 / month extra, which I will use to pay off debt quicker.

wordswords

Good news - my remortgage has completed, and unexpectedly it turns out I had overpaid £600 on the old mortgage, meaning I got a £600 refund, meaning that I was able to pay off my £100 / month loan that would have ran until December

My girlfriend has started work, and we've agreed that she will contribute around £100 a month now to household expenses, meaning that I will have an extra £100 a month.

So debt repayment goes down to:

£200 / month - parent loan
£160 / month - bank loan
= £360 / month (down from £500 / month)

Extra income:
£92 / month - extra income from mortgage decrease
£130 / month - extra income from job
£100 / month - extra income from girlfriend income
= + £322 / month from income (up from £0 / month)

This means I'm getting into a position whereby I can easily build up an emergency fund account, and also start 'stoozing' to pay off loans better.